Retail Media
27 April
eBay advertising grows 23% as promoted listings surge
CEO Jamie Iannone outlined upgrades to the marketplace's advertising products.
Photo by Oberon Copeland @veryinformed.com on Unsplash
×
The Current, delivered daily.
Ecommerce news, right to your inbox.
Sign up for our email newsletter.
Subscribe.sticky-cta-wrapper {
width: 100%;
position: fixed;
bottom: 0;
left: 0;
background-color: var(--black);
}
Subscribe to The Current newsletter
eBay is continuing to advance advertising, as the fast growth of promoted listings is helping to boost revenue.
The marketplace offers the latest evidence that retail media is growing rapidly as advertisers seek new avenues to reach consumers directly within platforms in the fallout from privacy-oriented changes that impacted performance marketing on social media platforms. Increasingly, the platforms where products are sold that are also the recipients of advertising spend, as they harness first-party data to reach shoppers while they are in the act of buying.
In the first quarter of 2023, eBay’s advertising results showed the following:
Overall advertising revenue was up 23% year-over-year to $317 million.
First-party advertising revenue, driven by promoted listings, grew 31% to to $285 million.
Over 2 million sellers adopted single ad products, while live promoted listings grew to 750 million.
Advertising accounts for 1.7% of gross merchandise volume (GMV), and outpaced volume by 33 percentage points. It was the third straight quarter that advertising outpaced volume.“
We continue to think we have a long runway ahead of us for advertising,” eBay CEO Jamie Iannone told analysts on Wednesday.
Here’s a look at the latest updates on advertising from eBay:
CPA
eBay’s cost per action (CPA) product remains the largest contributor to advertising growth, Iannone said. In the first quarter, the company rolled out a new machine learning model for ranking these ads.
“This ranking model also enables us to evaluate the expected performance of multiple ad products alongside each other rather than making ad-serving decisions in silos,” Iannone said. “This change will be beneficial as we continue to expand our multiproduct advertising portfolio.”
Promoted Listings
Ads that elevate listings to highly visible locations within the marketplace and search results are gaining momentum on eBay. These grew in the “mid-single-digits” over the quarter, Iannone said.
This was led by the more recently launched Promoted Listings Advanced, which is a cost per click (CPC) ad product. Along with being woven into more ad services, this format also saw a new quick setup tool, and received an upgrade to the relevance model during the quarter.
“That helped us present higher quality impressions and more GMV for the same number of impressions on the site,” Iannone said of the relevance model. “We also expanded CPC to the second row of ad placements within search results, which was previously only available to CPA. So it's still early in our CPC development. We're excited about these innovations.”
What's the return?
Iannone outlined the business model behind advertising at eBay. It’s a variable model, in which sellers can set their rates.
“We're seeing really good ROAS for our sellers. So when we look at the return on ad spend that they're seeing, once they start using our ad products, their sales are basically seeing a double-digit increase. And more importantly, when you look at the ROAS that they can get on eBay, it's very attractive relative to industry standards,” Iannone said.
eBay will continue to build new products for advertising, as well as reporting tools.
“We feel like we're doing a nice job of balancing the buying experience and keeping that incredibly healthy and strong conversion while continuing to drive our ads business. And finally, we're just making the product easier to use,” Iannone said.
From Your Site Articles
- Etsy will adopt a vertical strategy in 2023 | Ecommerce Bytes ›
- Retail Media - The Current ›
- Advertising - The Current ›
- eBay, Walmart and Roku are mixing entertainment and commerce ›
Related Articles Around the Web
Subscribe to The Current Newsletter
SubscribeTrending in Retail Media
Marketing
26 May
e.l.f. Beauty grew quarterly digital sales 75%. Here are the drivers
Upping marketing spend, growing loyalty members and multichannel sales are key to the beauty brand's strategy.
Photo by Andrea Castro on Unsplash
Digital commerce is helping e.l.f. Beauty pour fuel on the fire.
The brand continues to be one of the shining examples of the staying power of beauty products despite consumer pullback in other areas of discretionary spend. e.l.f. grew net sales 48% in the fiscal year ended March 31 as it reached $500 million in sales for the first time. For the most recent quarter, sales grew by a whopping 78%. The company is seeing profit gains as well, as adjusted EBITDA grew 56%.
With the top-line revenue flowing, the brand was opportunistic about how it invested in marketing in the most recent quarter. After upping spend to 33% of net sales in the quarter, the company ended up with marketing and digital investment at 22% of net sales for the year. That was well above the higher end of its 17% to 19% outlook. In the coming year, it expects 22% to 24%.
The fact that digital and marketing fall in the same category reflects the brand’s approach to marketing. It's a favorite among Gen Z, and has found a home on the social apps that are popular with the generation.
“Our disruptive digital-first marketing engine has built strength across multiple social platforms,” CEO Tarang Amin told analysts on the company’s earnings call. “We are a pioneer on TikTok and are now a four-time TikTok billionaire with our last hashtag challenge garnering nearly 15 billion views. We were the first major beauty company to launch a branded channel on Twitch and the first beauty brand on BeReal.”
As a sales category, digital penetration is now 17%, growing from 14% last year. The channel grew 75% in the most recent quarter.
Amin laid out three factors driving this trend:
Marketing. The marketing investment that e.l.f. made brought strong returns, and the digital-first nature of those ads are bringing people to the brand’s digital sales channels.
Loyalty. E.l.f.’s Beauty Squad loyalty program has 3.7 million members, which is a 25% year-over-year increase. Loyalty members are the biggest driver of the brand’s digital business, accounting for over 80% of sales on the brand’s DTC site.
Multichannel. e.l.f. is the only one of the top five mass cosmetics brands that has a DTC site, Amin said. It is also seeing strong growth at Amazon and other retailer ecommerce websites. The growing presence is “building upon itself,” Amin said.
With digital growth, the brand is seeking to expand capacity in the supply chain that will provide more efficiency and faster delivery, as well. It is shifting to a more distributed ecommerce fulfillment model. Previously, it had one automated warehouse in Columbus, Ohio, which meant shipping to the West Coast could take time. Now, it is moving to a multinode distribution network. With the first couple nodes up and running, there is already improvement in delivery times.
The brand is also adding distribution capacity to its main warehouse in Ontario, California.
As marketing helps more people discover and buy from the brand, the operational improvements will help create a customer experience that lives up to the hype.
Keep reading...Show less
Loading...
Subscribe to The Current Newsletter
SubscribeLatest from Retail Media
.sticky-cta-wrapper {
width: 100%;
position: fixed;
bottom: 0;
left: 0;
background-color: var(--black);
}
Subscribe to The Current newsletter